CEO Alan Mulally is racing against time as Ford's sales collapse continues to consume cash.

Ford Motor Company (NYSE: F) announced late yesterday that it has agreed to sell 300 million shares of its common stock in a public offering at a price of $4.75 per share for total gross proceeds of about $1.4 billion. Ford also granted to the underwriters a 30-day option to purchase up to 45 million additional shares of common stock to cover over-allotments. It is unknown if investors will buy all of the new shares of common stock in the offering.

The loss-making company also has a proposal pending at the annual meeting later this week for approval to issue additional shares of common stock in a transaction or series of related transactions in amounts equal to or in excess of 20% of the number of shares of common stock outstanding. Such a large issue requires shareholder approval. But with the Ford family holding 40% of the voting rights, it is likely to be approved, as the company continues to consume cash.

The latest stock issue of 345 million shares will dilute the amount of common shares outstanding by 11%, but in trading yesterday before the shares were priced investors sold off Ford and drove the price down 18% to $5.01. The one-year range on the shares is $1.01 to $8.37.

Ford lost $1.4 billion in the first quarter, after losing a record $14.7 billion in 2008, and decreased its cash from $28.7 billion in the first quarter of 2008 to $21.3 billion in cash for Q1 2009. In the first quarter the company also consumed $3.7 billion in cash. Production, sales, and market share are all declining. (more…)

Read the fine print carefully before buying any of the newly offered Ford Motor Company shares.

Ford Motor Company (NYSE: F) announced late today a public offering of 300 million shares of its common stock at a par value of $0.01 per share. Ford said it also expects to grant to the underwriters a 30-day option to purchase up to 45 million shares of common stock. It clearly is trying to cash in on the well publicized troubles of Chrysler and GM, although its own financial health is on life support.

Ford lost $1.4 billionin the first quarter and decreased its cash from $28.7 billion in the first quarter of 2008 to $21.3 billion in cash for Q1 2009. In 2008 it lost a record $14.7 billion. The offering, depending on final price, could raise $1.8 billion in cash.

Net proceeds to Ford from the offering are expected to be used for “general corporate purposes,” including to fund with cash, instead of stock, a portion of the payments the company is required to make to the Voluntary Employee Beneficiary Association (VEBA) retiree health care trust with the United Auto Workers union, which was agreed to earlier this year. The company also has a proposal pending at the annual meeting later this week for approval to issue shares of common stock in a transaction or series of related transactions in amounts equal to or in excess of 20% of the number of shares of common stock outstanding.

In total 3,147,397,653 common shares will be outstanding, if the underwriters’ option to purchase additional shares is exercised in full. There will also be 71 million shares of Class B stock. Each outstanding share of common stock is entitled to one vote on all matters submitted to a vote of shareholders. Each holder of Class B, which is held by members of the Ford family, have 40% of the general voting power, as long as at least approximately 60.7 million shares of Class B stock remain outstanding. This means a share of B has 22 votes compared with one vote for one share of common.

This effectively guarantees that control of the company resides with the Ford family, and is one of the primary reasons the company did not seek loan guarantees from the U.S. government since family control could have been lost in a restructuring. Instead, Ford mortgaged the company before the global financial crisis hit.

“We continue to make strong progress on our transformation plan – gaining retail market share with great new products, improving quality, reducing costs and positioning Ford for a return to profitability,” said Ford President and CEO Alan Mulally. “Today’s equity offering is another example of the fast, decisive action we are taking as we build momentum on our plan, including further progress on improving our balance sheet.”